The rapid expansion of artificial intelligence technology is creating unprecedented demand for rare earth metals and critical minerals, particularly those essential for data centers and AI infrastructure. The article highlights how the AI boom is intensifying competition for resources like lithium, cobalt, and other rare earth elements, with demand expected to surge significantly by 2025. A key concern is China’s dominance in the rare earth supply chain, controlling approximately 60% of rare earth mining and 90% of processing capabilities globally. This creates potential geopolitical vulnerabilities for Western nations developing AI technologies. The article emphasizes that a single AI training process can consume substantial amounts of these materials through hardware requirements, and the proliferation of AI services is driving the construction of more data centers, further straining supply chains. Industry experts warn that without diversification of supply sources and development of alternative materials, the AI industry could face significant bottlenecks. The situation is complicated by environmental concerns surrounding rare earth mining and processing. Companies and governments are now exploring solutions including recycling programs, alternative material development, and investments in domestic mining operations to reduce dependence on Chinese supplies. The article concludes that addressing these supply chain challenges is crucial for sustainable AI development and maintaining technological competitiveness.
Source: https://www.businessinsider.com/ai-rare-earth-metals-tech-data-centers-lithium-cobalt-china-2025-5